Exclusionary Policies in Urban Development, How Under-Servicing of Migrant Households Affects the Growth and Composition of Brazilian Cities

50 Pages Posted: 30 Jun 2008 Last revised: 15 Feb 2021

See all articles by Leo Feler

Leo Feler

Brown University - Department of Economics

J. Vernon Henderson

London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)

Date Written: June 2008

Abstract

Localities in developed countries often restrict construction and population growth through regulations governing land usage, lot sizes, building heights, and frontage requirements. In developing countries, such policies are less effective because of the existence of unregulated, informal housing markets. Cities in developing countries that seek to limit in-migration must also discourage entry into informal housing by providing low levels of public services to this sector. In this paper, we analyze the causes of slums, using data from Brazilian urban areas. We develop a model of the decisions that localities make to affect in-migration and find evidence that localities act strategically. Richer and larger localities in an urban area reduce provision of water and sewerage connections to the smaller houses in which poorer migrants would live to discourage the in-migration of these poorer migrants and deflect them to other localities. We also find that under-servicing smaller houses reduces the population growth rate of localities. Not only does it reduce the in-migration of low-educated households, it seems that, because of negative externalities, such under-servicing also reduces the growth rate of higher-educated households.

Suggested Citation

Feler, Leo and Henderson, J. Vernon, Exclusionary Policies in Urban Development, How Under-Servicing of Migrant Households Affects the Growth and Composition of Brazilian Cities (June 2008). NBER Working Paper No. w14136, Available at SSRN: https://ssrn.com/abstract=1152677

Leo Feler

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

J. Vernon Henderson (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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